Mastering the Marketing Communications Mix: Micro and Macro Perspectives on Integrated Marketing Communication Programs

One difficult challenge for marketers is the large, diverse means of communication and communication options that are available to support their brands (e.g. TV, print, and interactive advertising; trade and consumer promotions; arts, sports, and cause sponsorships; etc.). Consequently, marketers must understand what various marketing communication options have to offer and how they should be combined to optimize their marketing communications programs. Towards that goal, this paper considers issues in how to develop, implement, and evaluate an integrated marketing communication program. Specifically, to provide micro perspectives -- especially relevant for academic research -- we introduce the Marketing Communication Tetrahedron as a means of classifying and analyzing factors influencing marketing communication effectiveness along four broad dimensions (i.e. factors related to the consumer, communication, response, and situation). To provide macro perspectives -- especially relevant for managerial planning -- we provide criteria as to how integrated marketing communication programs can be designed and evaluated as a whole (i.e. according to coverage, contribution, commonality, complementarity, robustness, and cost considerations). We also describe how the two perspectives relate and conclude by discussing theoretical and managerial implications and outlining future research directions.     

Strategic Assortment Decisions in Information-Intensive and Turbulent Environments

Recent trends in the environment have caused changes in consumers’ store patronage, price sensitivity, and need for variety. These changes have led retailers to reconsider some of their assortment options. Specifically, we discuss how they may have led some retailers to move from a single-format to a multiple-format channel portfolio, how they may have contributed to the growth of the discount format, and how they tend to influence the private-label portfolio of many retailers. We end by showing how these assortment changes may, in turn, have various welfare, logistical, and tactical implications.     

Valuation of brand equity and retailer growth strategies using real options

In marketing, significant attention has been devoted to the study of drivers and outcomes of strategic flexibility drawing on real options theory. However, research that quantifies the specific value of flexibility reflected in a bundle of strategic real options is lacking. To remedy this gap, we develop a real options-based framework that takes account of brand expansion and extension options to value brand equity and retailer growth strategies. We show how to value the bundle of strategic real options associated with a flexible marketing strategic vision and how to assess the growth strategies related to the corporate brand of an international retailer. We apply our method to estimating the brand equity of Starbucks both under growth and adversity conditions. The results reveal that our method can more reliably incorporate the growth potential of the brand under uncertainty conditions. Comparisons with other brand valuation approaches are discussed. Our study helps clarify the links among management’s strategic plans, brand-based marketing strategies and share price, and allows to better monitor the impact of retailer strategic choices on long-term brand equity value.     

Older is better: Consumers prefer older drugs

Despite increasing research attention to healthcare marketing in academia and the concerted effort of the pharmaceutical industry to market its latest products, limited research has explored the effect of launch time on individuals' drug choices. Building upon findings in medical literature that many newly launched drugs are indeed no better than existing ones, this study found that the majority of consumers consistently prefer older drugs when both options are claimed equally safe and/or effective. The reason is that consumers disregard declarative information and, instead, make their own inferences. Although there is a small segment that chooses the newer option for what they infer to be its higher efficacy, most consumers believe that an older drug is both safer and more efficacious. Further, promotion-focused consumers are more likely to choose newer drugs. The underlying mechanism for how promotion focus affects choice is identified. A sample of practicing doctors cross-validated our findings, which have implications for practitioners in the pharmaceutical industry.     

The effect of attribute originality on consumers’ adoption intention of customization: The role of construal level

As consumers' preferences become increasingly diversified, many companies strive to satisfy individual needs by offering customization options for products or services. To enhance the effectiveness of customization strategies, managers need to decide what type of attributes to provide for consumers to customize and also take consumers' individual differences into consideration. The current research investigates the joint impacts of the originality of the attributes involved in a customization option and consumers' construal level on their intention to adopt customization. Findings from two experiments consistently demonstrate that, in comparison to customization options that include common customizable attributes, offering customization options that includes original customizable attributes undermine consumers’ adoption intention. However, such negative effects will be mitigated when consumers have a high construal level.     

Decisions with ChatGPT: Reexamining choice overload in ChatGPT recommendations

This research examines how individuals respond differently to recommendation options generated by ChatGPT, an AI-powered language model, in five studies. In contrast to previous research on choice overload, Studies 1 and 2 demonstrate that people tend to respond positively to a large number of recommendation options (60 options), revealing diverse consumer perceptions of AI-generated recommendations. Studies 3 and 4 further illustrate the moderating effect of recommendation agents and indicate that choice overload elicits distinct patterns of consumer reactions depending on whether the recommendations are from a human or AI agent. Lastly, Study 5 directly measures consumer preferences for recommendation agents, revealing a general preference for ChatGPT, particularly when a large number of options are available. These findings have significant implications for recommendation system design and user preferences regarding AI-powered recommendations.     

The relevance of interaction choice: Customer preferences and willingness to pay

As the number of available channels and ways to use these channels proliferate, current literature and managerial practice assume that broader interaction choice invariably generates value for customers. In light of the costs and complexity of offering these interaction options, the questions become how important having interaction choice is for customers, how much actual willingness to pay exists, and which customer groups particularly value such choice. To investigate this domain, two choice-based conjoint analyses are implemented in the health insurance industry, which provides a unique research opportunity since regulation naturally limits the relevant attributes of offerings. To cope with the substantial heterogeneity in prices for health insurance depending on the insureds' risks, the methodological innovation of quasi-individual pricing is introduced, which leads to highly satisfactory validity of the estimation results. The results indicate that customers have considerable additional willingness to pay for more interaction choice; however, in contrast to the extant literature, this does not hold for all interaction options. Customers' elicited preference structures further show that health insurers can optimize the configuration and pricing of their offerings to improve customers’ experiences and to create value.     

A good way to boost sales? Effects of the proportion of sold-out options on purchase behavior

The present research explores how the proportion of sold-out options in the choice set affects consumer purchase choices. Across five experiments, we find an inverted U-shaped relationship between the proportion of sold-out options in a choice set and consumer purchase choices. Fueling this effect are two competing processes: presence of sold-out options signals the overall quality of products in the choice set, which prompts consumers to purchase available options; while it also evokes psychological reactance, which impedes purchases. The quality signaling effect features a concave shape, whereas the psychological reactance force takes on a convex shape, so in combination, these two forces form an inverted U-shaped relationship. In addition, two boundary conditions were identified: (1) this effect is obtained only when psychological reactance is not induced by other situational factors; and (2) this effect disappears when consumers make purchases for others, not when they make purchases for themselves.     

I'll have what she's having: (Social) Perceptions of default options and implications for marketing and decision making

The power that default options have in shaping choice has been well established, yet relatively little is known about how decision makers experience and interpret such preselected options. Research suggests that individuals assume defaults represent a recommended course of action, yet the basis for this recommendation is unclear. Across two experimental studies, we explored consumer theories of default recommendations, examining spontaneous and experimentally manipulated perceptions of the basis of the default, and the impact on decision making across different contexts. Evidence across diverse populations and tasks shows that options were retained to a greater extent when represented as the default, consistent with classic default effects. Furthermore, a significant default effect emerged when the decision context was framed as complex. In line with research on social influence, defaults were most effective when they were presumed to reflect the most popular option (regardless of context). Interestingly, participants rated defaults as being more likely to represent the most popular option, regardless of decision context or default explanation provided to them. These findings highlight the importance of understanding the contexts in which default choices are relied upon and how those defaults are perceived by decision makers.     

A Study of Arbitrage Efficiency Between the FTSE‐100 Index Futures and Options Contracts

Despite the importance of the London markets and the significance of the relationship for market makers, little published research is available on arbitrage between the FTSE‐100 Index futures and the FTSE‐100 European index options contracts. This study uses the put–call–futures parity condition to throw light on the relationship between options and futures written against the FTSE Index. The arbitrage methodology adopted in this study avoids many of the problems that have affected prior research on the relationship between options or futures prices and the underlying index. The problems that arise from nonsynchroneity between options and futures prices are reduced by the matching of options and futures prices within narrow time intervals with time‐stamped transaction data. This study allows for realistic trading and market‐impact costs. The feasibility of strategies such as execute‐and‐hold and early unwinding is examined with both ex‐post and ex‐ante simulation tests that take into consideration possible execution time lags for the arbitrage trade. This study reveals that the occurrence of matched put–call–futures trios exhibits a U‐shaped intraday pattern with a concentration at both open and close, although the magnitude of observed mispricings has no discernible intraday pattern. Ex‐post arbitrage profits for traders facing transaction costs are concentrated in at‐the‐money options. As in other major markets, despite important microstructure differences, opportunities are generally rapidly extinguished in less than 3 min. The results suggest that arbitrage opportunities for traders facing transaction costs are small in number and confirm the efficiency of trading on the London International Financial Futures and Options Exchange. © 2002 John Wiley & Sons, Inc. Jrl Fut Mark 22:31–58, 2002     

Top Executive Pay in the United Kingdom: A Corporate Governance Dilemma

This study represents a first attempt in the UK literature to split total pay into salary, annual bonus and share options for the purpose of empirically verifying how each is related to executive performance. As predicted from earlier studies on total pay, salaries were found primarily determined by firm size. Contarary to prior research, however, our findings suggest a pronounced link does exist between performance and pay over both the short- and long-term. This is manifested particularly by the magnitude of the coefficient estimates found between changes in shareholders return and changes in executive share options. This finding strongly suggests that the leverage executives achieve, on average, in their rewards as share prices increase may well be substantial; a finding that has not been captured in previous research on executive remuneration and which is of considerable relevance to the current corporate governance debates.     

Payment formats and hedonic consumption

Payment formats have many important influences on consumer behavior. However, few studies have examined how the payment format affects hedonic consumption. This study explores how the transparency of the payment format (e.g., bonus points vs. cash) influences consumers’ willingness to pay, budget assignments, and consumption choices through differences in their perceived pain of purchasing (exchanging) hedonic and utilitarian options. Specifically, consumers who pay with highly transparent payment formats (e.g., cash), compared with consumers who pay with less transparent payment formats (e.g., store points, bonus points, and gift certificates), are willing to pay less, assign a lower budget, and are less likely to choose hedonic products. The perceived pain of purchasing (exchanging) a hedonic product plays an important mediating role on the influence of the payment format on hedonic consumption. However, the perceived pain of purchasing (exchanging) a utilitarian option plays a parallel mediating role only when people have paid for the less transparent payment format (e.g., buying store points) rather than when they accumulate the points through previous consumption events. The research findings provide insights that can benefit both theory and practice.     

The influence of R&D investment on the use of corporate venture capital: An industry-level analysis

We consider how internal research and development (R&D) influences the use of corporate venture capital (CVC) and how this relationship varies across industries. We find that, in general, R&D investments increase the number of CVC deals in an industry. We also find that R&D investment has a particularly strong influence on the use of CVC in industries that are growing rapidly and changing technologically. Our analysis provides greater clarity on the relationships involving R&D and CVC in the presence of contingencies by integrating insights of absorptive capacity and real options reasoning.     

中国环境下的跨国企业市场与非市场战略、策略以及战术间的关系

许多管理者认为,在中国市场上非市场环境应该与市场环境受到同样的高度关注,跨国企业经营战略应该由市场(或竞争)部分和非市场两部分组成。因此,本文提出了一个市场与非市场战略、策略以及战术之间关系的概念性理论模型。该模型反映了跨国企业在中国市场上是如何进行贸易或投资选择、策略选择和制定实施战略的。     

Increasing online sales by facilitating spillover shopping

The Internet can serve dual roles as a source of information and a shopping channel for consumers. As a source of information, it competes with traditional sources such as print and direct mail. As a shopping channel, it competes with traditional shopping formats such as brick-and-mortar retailing and catalogs. There is little research as yet, however, regarding how the use of the online channel for information can affect its use for purchasing products. Our research is aimed at filling this gap in the literature, i.e., of examining if and how the use of the Internet as a source of information can affect consumers’ willingness to shop online. We use an integrated modeling framework that simultaneously models consumers’ choice of a shopping channel from three options – brick and mortar, catalog and online – and a source of information from three options as well: newspapers and magazines, direct mail, and online.     

On the Practical Application of the Real Options Theory

This article aims to present and explain the potential of the real options theory. This theory can help solve many corporate problems in the field of investment strategies. It incorporates a wide range of internal and external factors that are playing a potential role in strategy outcome. The real options tool has already been applied in many industries and many divisions of their business. The main advantage of this methodology is that management is forced to develop a more structured thinking pad due to the fact that real options is based on a clear and accurate procedure. © 2001 John Wiley & Sons, Inc.     

Finding the Right Words: The Influence of Keyword Characteristics on Performance of Paid Search Campaigns

Despite its importance for both e-commerce and traditional offline vendors, managing paid search campaigns is often based on trial and error. In particular, neither research nor practice has extensively addressed identifying relevant keywords and setting appropriate matching options. The authors develop a model based on a keyword's intrinsic and extrinsic information content to shed light on how keyword characteristics affect campaign performance. Intrinsic information includes linguistic aspects and user- and content-related features, which can be indirectly changed through extrinsic information such as matching options. Using an advertiser-level data set from multiple industries, this study evaluates the impact of these criteria on click-through and conversion rates. The authors find that the query variation index, which measures whether a keyword contains sufficient information to identify a user's information need correctly, is an effective predictor of keyword performance. Moreover, they show that the relationship between two of the main predictors, namely, query variation and advertiser names, and a keyword's performance is moderated by the advertiser's choice of matching options.